The world of cryptocurrency exchanges is constantly evolving and changing. I entered the world of exchanges back in 2013, starting off with Huobi. Back then, from 2013 to 2017, many Chinese users had a strong affinity for Huobi. In every era, there are always founders of exchanges who are deeply dedicated to their platforms, pouring their passion into them. However, after the 94 incident in 2017, conversations around me shifted towards Binance, BNB, ICOs, and exchanges expanding overseas. Over the past two cycles, under the leadership of figures like @cz_binance and @heyibinance, the Binance team ventured overseas, expanding its reach and becoming the largest exchange globally with over 300 million users. Today, we delve into the recent market discussions surrounding listing fees following Binance’s inclusion of 19 early Launchpool projects this year.
Exchanges Cannot Ensure Profits
Let’s examine some data: the average ROI for Binance Launchpool projects this year stands at 2.13 times, boasting an average valuation of USD 326 million and a total of USD 929 million raised through Launchpool. These figures are undeniably impressive. While retail traders typically do not hold Nasdaq, Hong Kong Stock Exchange, or Shenzhen Stock Exchange responsible for losses incurred due to poor quality projects, the landscape changes when it comes to platforms like Binance. The airdrops of new projects received by users holding BNB or FUSD have led many to adopt a simple mindset. Some users are not concerned about the quality of projects, choosing instead to sell immediately upon launch and convert to BNB. During bullish markets, the rise of new projects and the resulting wealth effect bring joy to the project teams, exchanges, and retail BNB holders.
Where Do the Doubts Originate? User Expectations and Investment Trends
As the largest exchange globally, Binance carries a weight of expectations it must bear. Since the inception of Launchpad in 2018, Binance has continuously explored and listed new projects over the past two cycles, with many projects proving successful in the long run. While the ICO projects involving OK and Huobi from the last cycle may have faded from memory, Binance’s Launchpad projects have stood the test of time. Binance has emerged as the exchange with the highest liquidity, with most projects distributing tokens through its platform, ensuring ample chip allocation and digestion, making it resilient to market fluctuations. In recent cycles, many community users who conduct thorough research have admired Binance’s analytical capabilities and often invest when projects go live. However, with several projects showing a downward trend from the start, the number of retail buyers has dwindled significantly, with some projects even witnessing single-digit new buyers.
The Binance Model and Emerging Patterns
From a participant’s standpoint, Binance, as the largest exchange, allows BNB users to receive project airdrops for free, boosting the potential value of BNB and increasing trading activity. Consequently, BNB holders expect Binance to guide them towards the best investment opportunities with little room for error. However, the market has seen the emergence of projects with fabricated data and VCs that follow the Binance model, packaging user growth, data activity, and TVL in a unified manner. As such occurrences become more common, questions arise regarding Binance’s professionalism. Recently, there has been a trend where certain projects target KOL accounts followed by He Yi @heyibinance on Twitter, bribing these influencers to promote project-related content. The information cocoon effect on Twitter pushes users towards similar content, raising concerns about whether He Yi has fallen into an information cocoon dilemma.
How Can Binance Overcome the Impasse?
Transparency of Information and Stricter Measures Against Problematic Projects
Binance’s way forward involves transparency, including the development of an information module for Launchpool projects, which has been well-received. However, the prevalent notion that He Yi is the final decision-maker means that all signals revolve around him, leading to preconceived notions and understandings. While Binance has established a “Great Firewall” for projects invested by Binance Labs, there is a need for similar standards for Western teams investing in Binance. Prudent due diligence, diverse decision-making, and a strict stance against fraudulent projects are vital for Binance to maintain its integrity. The exchange should foster increased interaction between its research and listing teams, prioritizing research and periodically disclosing its interests to gather market feedback.
Departmental Interest Isolation and Enhanced Conflict Avoidance Measures
To avoid conflicts of interest, Binance should separate its listing and investment departments. The listing department must remain objective and fair, serving as a filter for quality projects to safeguard user interests. While recent claims suggest a biased approach towards projects invested by Binance Labs, a uniform standard should apply to Western teams investing in Binance. Prudent due diligence, diverse decision-making processes, and a firm stance against fraudulent projects must be integral to Binance’s operations. By fostering transparent dealings, Binance can establish itself as a trustworthy platform for investors.
In conclusion, Binance’s success hinges on its ability to navigate the evolving landscape of cryptocurrency exchanges while maintaining transparency, integrity, and a commitment to user interests. By addressing challenges related to listing fees, project quality, and user expectations, Binance can reinforce its position as a leading global exchange. As the cryptocurrency market continues to evolve, exchanges must adapt to meet the changing needs of investors and uphold industry best practices.